Globalization and Its Discontents

Stiglitz, Joseph E. (2003, May). Globalization and Its Discontents.
ISBN: 0393324397. W. W. Norton & Company. 304 pp.

BOOK REVIEW

In 2001, John E. Stiglitz shared the Nobel Prize in Economic Sciences with two others for augmenting in the 1970s the theory of markets with asymmetric information (Bank of Sweden prize, 2001). Markets with asymmetric information is Stiglitz’s main topic in his Globalization book.

In Globalization and Its Discontents, Stiglitz referred to larger players than mere agents of the market, landowners, and tenants – and these are the multilateral institutions and their principal shareholders in pressing developing countries – supposedly to liberalize their economies. In this controversial book, Stiglitz argues that although globalization should be a powerful force for good, it has been badly mishandled by the West, especially with its lead institutions, the World Bank and the IMF. As Stiglitz contends, those concerned with economic development have seen economic openness and liberalization as panaceas. Instead of progress however, he argues, the result has all too often been devastation.

What happens, according to him, is that developing countries open themselves to trade, deregulate their financial markets, and abruptly privatize national enterprise but then experience more economic and social disruption than growth.

Stiglitz then proposes better management, a greater degree of transparency and a wider debate on issues in which its social dimensions are given their proper emphasis, and then “the world can come closer together and become more prosperous.”

Overall, this book is a daring expose on what is happening in the corridors of the IMF and the World Bank. For someone whose heart is with the plight of the developing countries, this was expected of Stiglitz. To be sure, however, the book did not just come out of the blue like that of a journalist who had to report on an expose.

Stiglitz was reared in a home where politics occupied family discussions. (Stiglitz. Autobiography, 2002). His critical attitude and questioning skills had been honed by professors who cared about their student learning. While young, Stiglitz’s mind was filled with questions about the whys of inequality and practices like segregation. As part of the globalization debate, this book may be said to be one-sided in that it criticizes markets too often while sparing government. He is accurate though for his calls to proper sequencing of alternatives to help bring about a more gradual transformation of society.